Barbora Drugdová. University of Economics in Bratislava, Bratislava, Slovak Republic

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1 Management Studies, Mar.-Apr. 2019, Vol. 7, No. 2, doi: / / D DAVID PUBLISHING On the Issue of Commercial Insurance Market as in the Slovak Republic Barbora Drugdová University of Economics in Bratislava, Bratislava, Slovak Republic The industry in the Slovak Republic has become an important dynamically developing area of economy. Insurance affects all the activities into the national economy, touching every company, business, citizen, society, and foreign countries. The Slovak market is developed. As at , there operated 21 commercial companies on the Slovak commercial market. The evolution of the market in life in recent years is more dynamic than in the non-life. Keywords: commercial market, life, non-life, indicators of the market, commercial companies Introduction Insurance as a non-productive sector is of a vital importance to the national economy of every advanced and modern economy. Insurance, as one of the ways of covering the risks, is part of the finances, namely the finances of all the entities of the national economy. Insurance plays an important role not only in the of business risks, but also in international risks, which we include according to Insurance Act No. 39/2016 Coll. on Insurance in the Slovak Republic among non-life risks. Insurance and intervene directly or indirectly in all areas of human activity, so they affect every business, enterprise, citizen, society, and foreign. All changes in the company are also in some way reflected in the business. The development of science, technology, and culture brings new modern products, new activities, and new risks to the market. These risks must be taken into consideration and calculated by businesses and entrepreneurs, citizens, the state, and companies. Therefore, commercial insurers have to prepare new products for the market, while monitoring developments throughout the economy (e.g., unemployment, GDP growth, inflation, price growth, money income movements, demographic data, etc.). While explaining the essence of, we assume that the operation of the market mechanism involves the transfer of risk from one entity to the Community and the joint bearing of losses under predetermined conditions by all members of that community (E. J. Vaughan & T. M. Vaughan, 2007). Since January 1, 2004, the Slovak market is an inseparable part of the European Union s single market. In practice, this means that commercial companies in all EU Member States have the option to perform and re activities in the Slovak Republic. This is also true of the Barbora Drugdová, Ing., Ph.D., Department of Insurance, Faculty of National Economics, University of Economics in Bratislava, Bratislava, Slovak Republic. Correspondence concerning this article should be addressed to Barbora Drugdová, University of Economics in Bratislava, Dolnozemská Rd. No. 1, Bratislava 85235, Slovak Republic.

2 158 INSURANCE MARKET AS IN THE SLOVAK REPUBLIC reverse relation: domestic insurers in the Slovak Republic can offer their services to clients in other countries of the European Union. In connection with the integration into the market of the European Union, it was necessary to adapt the legislation of the Slovak Republic in the field of and the industry to the legislation of the European Union, which affected both life and non-life. The last law, which came into force on 1 January 2016 was Act No. 39/2015 Coll. on. Under this law, there are changes that affect individual sectors in both life and non-life. Characteristic of the Insurance and its Delimitation/Definition The market is the place where supply and demand for come together. Insurance is a specific commodity, the essence of which is the transfer of risk. The market operates on the basis of market principles. The market has a significant position in each market economy with specific roles, principles, and meanings. Pretože ponúka nástroje na riadenie rizík, ktoré súčasná riziková spoločnosť produkuje (Beck, 1992). The industry, covering the market, has an irreplaceable position in every economy because it offers the risk management tools that the current venture company produces. As a result, it is also referred to as a secondary sector of economic activity because it deals with the negative consequences that would have occurred even if the had not existed. The subject of the market is and re. Insurance, as one of the important sectors of the market economy, offers its services in the market, or and re. The industry includes houses, companies, companies from other Member States, branches of an company from another Member State, foreign and re undertakings from another Member State, intermediaries, supervision, association, insurers office, institutions offering apart from their main business (banks, leasing companies, car services, etc.) and other entities. In the Slovak commercial market, similarly as in other European Union countries and in the advanced world in a strong competitive environment, commercial companies and their intermediaries are applying for clients the insured. Similarly, as in other markets, the condition of fair competition includes the creation of quality products and their price evaluation (reasonable price for optimum protection). The commercial market, its scope, efficiency, and the importance in terms of the national economy can be characterized by several indicators. Among the most frequent indicators we encounter in the literature are the following: the number of commercial insurers, technical premiums, the share of life and non-life in GDP, the ratio of life and non-life, the number of employees of commercial insurers (number of internal and external employees), products, and other indicators. In the next part, we analyze selected indicators of the commercial market for Analysis of Selected Indicators of the Commercial Insurance Market in the Slovak Republic for the Year 2017 In 2117, twenty-one commercial companies operated in the Slovak market, creating a relatively strong competitive environment among them. Of the total number of insurers operating on the Slovak market, 21 commercial companies were associated in the Slovak Insurance Association as of 31 December Of the members of the Slovak Insurance Association, 14 commercial companies had universal/general licence; life was provided by four commercial insurers and non-life

3 INSURANCE MARKET AS IN THE SLOVAK REPUBLIC 159 by three commercial companies. (Spring: Slovak Insurance Association (SAP) Internal Materials, Bratislava, 2018). The most important indicators of the commercial market include technical premiums. Table 1 shows the technical premiums as at 31 December 2016 in thousands of euros and that as at 31 December 2017 thousands of euros. We present both years to compare the development of this indicator of the market. Table 1 Technical Premium Insurance Premium as at 31 December 2016 and as at 31 December 2017 in EUR Thousands Year Life Share Non-life Share Total ,145, % 964, % 2,109, ,279, % 1,167, % 2,447,281 Source: Internal materials, SAP, Bratislava 2016; In the next part of the paper, we compare the years 2016 and We will analyse the total technical premium as at 31 December 2016 and as at 31 December 2017 and the technical premium of life and that of non-life as at 31 December 2016 and 31 December The total technical premium as at 31 December achieved the amount of 2,109,993 thousand euros. Of this, the technical life- non- premium amounted to 1,145,414 thousand euros and the non-life technical premium was 964,579 tis. euros. As at 31 December 2017, the total technical premium achieved the amount of 2,447,281 thousand euros. Of this, the technical premium of life amounted to 1,279,400 thousand euros, and the technical premium of non-life was 1,167,881 thousand euros. The total technical premium in 2017, was 2,447,281 thousand euros in comparison with the total technical premium in the year 2016, which was 2,109,993 thousand euros it was higher in comparison with preceding year. The share of life on the total technical premium in the year 2017 was 52.3% and in the year 2016 it was 54.3% it was a decline in comparison with the preceding year. The share of non-life on the total technical premium in the year 2017 was 47.7% and in the year 2016 the amount was 45.7% an increase in comparison with the previous year. The ratio of life and non-life in the year 2017 was 52.3 : 47.7, and in the year 2016 it was 54.3 : 45.7 in favour of life. Table 2 depicts the technical premium in life and non-life as at 31 December 2017 in thousand euros and the participation of individual commercial companies in the total technical premium on the Slovak market. The total technical premium in 2017 was 2,447,281 thous. euros. As can be seen from Table 2, technical in life and non-life as at 31 December 2017 (ths. Euro) of the company Allianz Slovenská poisťovňa, a. s., indicates it was the leader in the Slovak market in the life business with 239,329 thousand euros and in non-life with CZK 364,039 thousand euros. The second position was occupied by KOOPERATÍVA, company, a. s. in the area of life amounting to 202,263 thous. euros and also in non-life amounting to 226,431 thous. euros; the third place in life business was taken by the company of the Slovak Savings Bank, a. s. VIG with 154,122 thous. euros and in non-life by the company Generali Slovensko, company, a. s. with 130,280 thous. euros.

4 160 INSURANCE MARKET AS IN THE SLOVAK REPUBLIC Table 2 Technical Insurance Premium in Life Insurance and Non-life Insurance as at 31 December 2017 in EUR Thousands Technical premium (in EUR thousands) as at 31 December 2017 No. Commercial company Technical premium in life 1 AEGON Life Insurance company, a.s. 48, Allianz Slovenská poisťovňa/slovak Insurance company, a. s. 239, ,039 3 ČSOB Poisťovňa/Insurance company, a. s. 48,724 37,619 4 ERGO Life Insurance company, a.s. 6, Generali Slovensko company, a. s. 94, ,280 6 NN Life Insurance company, a. s. 74, KOMUNÁ LNA company, a.s.vig 108,202 87,229 8 KOOPERATIVA company, a. s., VIG 202, ,431 9 Insurance company Cardif Slovakia, a.s. 6,447 17, Poštová poisťovňa/post Office Insurance company, a.s. 12,494 1, Insurance company of the Slovak Savings Bank, a. s. VIG 154, UNION Insurance company, a. s. 9, UNIQA Insurance company, a. s. 37,594 92, Wüstenrot Insurance company, a. s.. 31, AXA, life- company, a. s. branch of from another Member State 55,214 13, AXA, company, a. s. branch/agency from another Member State BASLER, Sachversicherungs, company, a. s. from another Member State 0 4, Collonade Insurance, S.A., company, a. s. from another Member State 0 23, D.A.S. 0 2, Groupama company, a.s., branch/agency 370 7, MetLife, Europe 120,326 6, Slovak Office of Insurers 0 11 Technical premium in non-life Total 1,229,254 1,167,881 Source: Internal materials, SAP, Bratislava Conclusion We can state in conclusion that the Slovak market is a dynamically developing market, which forms part of the financial market. The total technical premium in the year was 2,447,281 thousand euros. The share of life of the total technical premium in the year 2017 was 52.3% and in the year 2016, it was 54.3% a decline in comparison with the preceding year. The share of non-life on the total technical premium in the year 2017 was 47.7% and in the year 2016, it was 45.7% an increase in comparison with the preceding year. The ratio of life to non-life in the year 2017 was 52.3 : 47.7 and in the year 2016, it was 54.3 : 45.7 in favour of life. The population is gradually becoming aware of life risks and uses products of life. The offer of products in the area of life as well as non-life via commercial companies on the Slovak market is flexible.

5 INSURANCE MARKET AS IN THE SLOVAK REPUBLIC 161 References Beck, U. (1992). Risk society: Towards a new modernity. London: Sage. Comité Européen des Asurances European. Paris Drugdová, B. (1995). Poistenie A Poisťovníctvo, nemecko-slovenský a slovensko nemecký slovník. Bratislava: ELITA. Drugdová, B. (2016). Neživotné poistenie v teórii a praxi. Bratislava: ŠEVT. Kunreuther, H. C., Pauly, M. V., & Mcmorrow, S. (2013). Insurance and behavioral economics: Improving decisions in the most misunderstood industry. New York: Cambridge University Press. Vaughan,E. J., & Vaughan, T. M. (2007). Fundamental of risk and. New York: John Wiley and Sons.